Discount coupons and the like (e.g., "cents off" coupons, rebate coupons, special offer coupons, or the like, collectively referred to herein as "coupons") have become an integral part of marketing strategies for many products, particularly retail consumer goods, sundries, foodstuffs, hardware, clothing, and the like, typically sold at local grocery, drug, and discount stores. Product manufacturers have come to rely upon coupons, rebate and gift certificates or the like to promote new and existing products, boost sales, and obtain demographic information concerning consumer buying patterns. Consumers have come to rely upon coupons or certificates as a technique for reducing costs.
Prior art couponing techniques have had several disadvantages, not the least of which are low response rate and fraud. In the prior art, coupons may be distributed using direct mailing techniques, printed in newspapers, magazines, or the like, distributed with other commercial goods (e.g., laundry soap coupon packaged with washing machine), or distributed (e.g., by original equipment manufacturers or OEMs) with the same or like goods, computers or the like (e.g., "cents off" toward next purchase). Such techniques require massive amounts of printing and distribution, and historically have a low response rate (e.g., typically less than 2% of coupons distributed are redeemed). Thus, such mass-distribution techniques may not be cost effective, and are not environmentally friendly, due to the large amount of paper wasted.
Such low response rates may be due in part to the difficulty a consumer may have in maintaining, cataloging, and finding appropriate coupons before shopping. A particular consumer may have at his or her disposal only those coupons which have been sent to him or her and have been retained by the consumer. Moreover, since many coupons have expiration dates, a consumer may have to carefully catalog each coupon to insure that it is redeemed before such an expiration date occurs. Such techniques are time-consuming arid cumbersome. Generally, only those consumers on a budget or those who use couponing as a hobby have sufficient time to maximize their use of available coupons. Busier and more affluent consumers may not believe that such coupon management techniques are cost effective. This latter group of consumers may represent a more desirable demographic for a product manufacturer to attract or track.
With the advent of double or even triple redemption couponing promotions provided by some retail stores (e.g., grocery store chain or the like) as well as generous cash rebate coupon promotions (i.e., gift certificates or the like), fraud had become an every increasing problem in coupon marketing. Color photocopiers may create coupons which are indistinguishable from originals. Unscrupulous consumers may use such copied coupons to purchase large numbers of items at reduced prices or fraudulently obtain rebates for products which were never purchased. Moreover, some unscrupulous retailer may conspire with coupon brokers to redeem large numbers of illicitly obtained or generated to defraud manufacturers.
As coupon discounts or rebates may be used for promotional purposes, the resulting net price to the consumer with such a discount may be less than the product manufacturer's wholesale price. A product manufacturer may offer such steep discounts in the hope of obtaining future sales at full retail prices. If a consumer uses a photocopied coupon for multiple purchases of a retail item, the product manufacturer may not obtain the desired repeat sales at full retail price, and the entire scheme of couponing may be defeated.
In addition, prior art couponing techniques have yielded little, if any, useful data to product manufacturers regarding who is redeeming such coupons. Consumer demographic data is invaluable to a product manufacturer in determining which products to target to particular consumer groups (e.g., through particular advertising venues). Moreover, such demographic data may be used to more efficiently distribute future coupons. In addition, information as to the buying habits (i.e., recency, frequency, and monetary value or RFM) and demographics of particular consumers or groups of consumers has a market value and such information may be sold or traded for a profit.
Various techniques have been tried to eliminate or reduce fraud, provide more convenient techniques for distributing coupons, and to better track consumer demographic data.
De Lapa et al., U.S. Pat. No. 5,353,218 discloses a focused coupon system. FIG. 6 of De Lapa et al. is most illustrative. De Lapa et al. discloses a system for distributing coupons with a machine readable code (barcode) containing both customer and coupon identifications. The consumer code may be replaced with a generic code used in a look-up table for coupon verification and information. The entire machine readable code may be captured and uploaded to a central database for determining coupon and consumer identification. The uploaded information may be used for marketing purposes (to determine which coupons to next send to the consumer) and/or for rebate purposes.
Although the system of De Lapa et al. attempts to provide a more focused distribution technique, the system still relies upon paper coupons being distributed to consumers. Consumers may throw out such mass mailings (i.e., "junk mail") without opening them. Moreover, the system relies upon the consumer supplying demographic information in a questionnaire or the like in order to be provided with the coupons. Moreover, since the coupons of De Lapa et al. are preprinted, coupon trading or copying may be more prevalent.
Furthermore, in De Lapa et al., no mechanism is present for capturing subsequent demographic information. In addition, as consumer data is captured at the store level, an additional mechanism may be required to upload such consumer information to a centralized database to capture consumer demographic information. Additional data processing hardware/software may be required at a retail store in order to process such data. Thus, retailers may be initially reluctant to invest in such a scheme.
In retailing, it may be essential to check out consumers in as little time as possible. Thus, if additional processing time is required during customer check-out to process the coupons of De Lapa et al. retailers may be less likely to accept adopt such technologies.
Moreover, under the scheme of De Lapa et al., there is no mechanism provided to insure that the individual who receives the coupons is the targeted individual. If a consumer moves to a new address, new occupants at the old address may receive and redeem coupons addressed to the consumer. Thus, target tracking data may be inaccurate or incomplete.
Murphy, U.S. Pat. No. 5,305,195, issued Apr. 19, 1994, discloses an interactive advertising system for on-line terminals. A series of remote terminals receive compressed and encoded video advertising signals which may be stored on an internal hard drive. The advertising videos are played, and a consumer may select products using the terminal. In FIG. 4, (Col. 7, lines 45-50) Murphy discloses that a printer may be provided for printing selected coupons.
The apparatus of Murphy may solve some of the problems associated with distributing coupons in paper form. However, The Murphy system appears to be more concerned with directing advertising information than collecting demographic information or distributing coupons. Thus, it does not appear that the apparatus of Murphy is equipped to process demographic information or reduce coupon fraud. Moreover, Murphy discloses his apparatus for use in college campuses, a limited and narrow consumer demographic.
Von Kohorn, U.S. Pat. No. 5,128,752, issued Jul. 7, 1992 discloses a system and method for generating and redeeming tokens selected from television data. Product information and authentication data may be transmitted and displayed on a television and a home printer. A viewer may select a coupon for printing and redeem the coupon at a retail store.
Von Kohorn does disclose a technique for reducing fraud (Col. 7, lines 16-38). However, it appears that these techniques require action at the retail level to verify that a coupon is indeed legitimate, including, in one embodiment, requesting identification credentials from the consumer. Such techniques may be intrusive and cumbersome to use in a retail establishment where a number of coupons may be redeemed at any given time.
Moreover, it does not appear in the system of Von Kohorn, which relies on broad-casting, does not target specific consumers with particular coupons. Rather, it appears that the coupons are distributed to all viewers equipped with the appropriate apparatus. Note that: in FIG. 6 (Col. 9, lines 40-48) Von Kohorn discloses a technique for recording marketing data from consumer information encoded into the coupon.
Axler et al., U.S. Pat. No. 5,305,197, issued Apr. 19, 1994, discloses a coupon dispensing machine with feedback. A consumer kiosk is placed in a retail establishment or the like to display advertising (LED scroll) and allow customers to print out selected coupons. A proximity sensor detects the presence of customers near the apparatus.
The Axler device may solve some of the problems associated with paper distribution of coupons. However, it does not appear that the Axler device may retrieve any significant amount of consumer demographic data other than the number and type of coupons printed. Moreover, within the in-store environment, it may be difficult to enter such consumer data, particularly with the keypad disclosed by Axler. Thus, it does not appear that the Axler device may be suitably adapted to retrieve consumer demographic data.
A fundamental fault with the Axler device is that it does not appear to target or prior motivate customers with to visit a retailer with specific coupons. Rather, the in-store location of the Axler device may facilitate a consumer "targeting" a coupon. In other words, a consumer may make a number of product selections in a store and then visit the coupon kiosk of Axler to determine whether any purchases are subject to coupon discount or rebate. Thus, the fundamental goal of couponing--to motivate a consumer to purchase a product--may be compromised.
In addition, the kiosk of Axler may occupy valuable commercial retail space. In a retail store (e.g., supermarket or the like) even a few feet of shelving may be extremely valuable for displaying and containing retail merchandise. Product manufacturers may even pay "rent" to a retail establishment in the form of rebates or promotional fees in order to obtain prominent shelf space. Thus, a retail establishment may be loathe to give up such valuable space to a couponing kiosk. Moreover, it may be time consuming and frustrating for customers waiting in line to access the kiosk. Providing additional kiosks may be cost-prohibitive.
Tai, U.S. Pat. No. 4,908,761, issued Mar. 13, 1990, and assigned to Neighborhood Marketing Corporation, describes a system for identifying heavy product purchasers who regularly use manufacturers' purchase incentives and predicting consumer promotional behavior response patterns. Delivery of coupons to selected consumer households also includes the use of a plurality of consumer activated coding devices (bar coded stickers) which may be attached to the coupon. The bar coded sticker indicates the name and address of the receiving consumer. When the coupon is redeemed and read, data may be collected determining which consumers of the selected consumer households redeemed which products, as well as size and price of the product purchased.
One disadvantage of the sticker system of Tai is that it requires a consumer to go through the laborious task of affixing stickers to individual coupons manually. Thus, the technique may not reach beyond the traditional coupon-clipping demographic. Product manufacturers may be more interested in the buying habits of more affluent purchasers, who may be less inclined to spend time affixing stickers to coupons.
Moreover, the device of Tai does not appear to address the data reliability problem in the couponing business. Once a sticker is attached to a coupon, it may be redeemed. Thus, coupons with stickers attached may be sold, traded, or swapped with other coupon aficionados, and thus true demographic data may be lost or inaccurate. If the person redeeming the coupon is not the targeted consumer, the preference for that product, inferred from the coupon redemption, may not reflect the purchasing desires of the target consumer, but rather that of another person.
The Tai system appears to some features which may be used to assist in fraud detection. For example, by applying a sticker to the coupon, it may be more difficult for an individual to photocopy a coupon for subsequent re-use. If a coupon is photocopied with the sticker in place, the resultant copies may be more readily detectable as fraudulent due to the lack of a real sticker being present. Moreover, as the sticker may indicate a consumer name, it may be possible to trace such fraud or at least discourage such fraud, as the consumer will know that his or her name is attached to the coupon.
However, as present coupons do not use stickers, it may be possible that a checkout person may not detect a fraudulent coupon (e.g., photocopied sticker) and thus the coupon may be redeemed. Once redeemed, it may be difficult to prove a particular consumer cashed a particular coupon. Moreover, coupon fraud may not be limited to consumers alone. Store owners, managers, and distributors may attempt to fraudulently replicate coupons for redemption. Thus, a consumer may redeem a stickered coupon, only to have it copied by an unscrupulous person in the redemption chain. Falsely accusing a consumer of coupon fraud could backfire and lead to potential legal and public relations problems for manufacturers.
Moreover, the Tai system still relies upon paper coupons, which may be difficult to count, sort, and redeem. Consumers may be adverse to using paper coupons, as such coupons may be difficult to cut out, handle, and store. Redemption and counting of paper coupons may be a time consuming and laborious task, both at the retail level, and at coupon clearing houses. Moreover, paper couponing techniques may be much more prone to fraud due to counterfeiting.
Many grocery stores have in place so-called "savings clubs" or frequency programs. For example, the Safeway.RTM. chain of retail supermarkets distributes a "Savings Card" to consumers. For the purposes of this application, such cards may be referred to as "frequency cards". A frequency card may comprise a combined check cashing and discount card provided with a magnetically encoded strip. Once a consumer has checked out at a grocery or other store, the card is read by a magnetic reader. Data from the card verifies the identity of the consumer for check cashing purposes, if required. Moreover, the consumer identification may also be stored, along with data indicating which products were purchased. In addition, special "in-store" or advertised promotional discounts for selected products may be applied to reduce a consumer's total bill.
It should be noted that the use of debit and credit cards for retail grocery shopping has increased dramatically. Retailers prefer the use of such cards, as they reduce the incidence of bad check charges and the like associated with conventional payment methods. Moreover, use of debit and credit cards reduces the amount of cash received, thus reducing opportunities for internal theft and making stores less attractive robbery targets. Thus, for the purposes of this application, the term "frequency card" may be construed to include credit and debit cards and the like.
Such frequency cards may be very useful in collecting consumer demographic data. However, such cards may have some drawbacks when attempting to promote individual products. For example, if a consumer is aware that use of the card will result in automatic deduction of promotional discounts from his or her total bill, then the consumer may automatically use the card without consciously choosing the promotional items first. Any savings due to promotional discounts may be viewed by the consumer as windfalls, rather than planned strategic buying decisions. Product manufacturers and distributors may instead wish to alert a consumer to specific promotional discounts to motivate consumers to look for particular products when visiting a store.
Thus, it remains a requirement in the art to provide a fraud-resistant, easy-to-use, paperless technique and system for inducing consumers to shop for particular products to obtain particular discounts while simultaneously capturing consumer discount redemption data.